Annual inflation in the United States ran at its quickest pace in more than six years even as consumer prices rose modestly in May, according to government figures released Wednesday, June 12, 2018.
Higher gasoline and shelter prices accounted for the overall monthly increase, for the most part, with average prices unchanged for some major items like food, clothing and transportation services. Higher gas and shelter costs also played a large roll in driving inflation higher from a year ago.
Consumer prices in May rose 0.2%, matching the previous month, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from vegetables to vehicles.
"Inflation isn’t surging, but it is persistently edging higher," The Wall Street Journal quoted Jim Baird, chief investment officer for Plante Moran Financial Advisors. "Remember the concerns about deflation just a few years ago? That ship has sailed."
In two key areas:
Prices at the pump moved up 1.7% last month after surging 3% in April. They jumped 21.8% from May 2017. The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 0.9% in May after rising 1.4% previously. The Labor Department’s report shows it increased year-over-year by 11.7%.
Food prices were unchanged after rising 0.3% in April — the most in more than a year. They logged a 1.2% increase over the past 12 months.
Excluding the more volatile food and energy components, so-called core consumer prices also climbed 0.2% last month after inching up 0.1% in April.
"The indexes for new vehicles, education and communication, and tobacco increased in May, while the indexes for household furnishing and operations, and used cars and trucks fell. The indexes for apparel, recreation, and personal care were unchanged," the report said.
Shelter or housing costs grew 0.3% for a second straight month. The index rose 3.5% year-on-year. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels, and housing at schools. The index accounts for about one-third of the entire CPI.
U.S. inflation advanced 2.8% in the 12 months ending May compared to the previous increase of 2.5%. The headline year-over-year figure represents the quickest inflation pace since February 2012, when inflation was 2.9%. The level has trended upward since the period ending June 2017.
Core inflation grew 2.2% from a year earlier, the strongest gain since February 2017, following two consecutive increases at 2.1%. Until March, the 12-month reading had held at either 1.7% or 1.8% for 10 consecutive months.
The core annual measure is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.
The following table of key inflation figures is for the last seven months through May, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi). To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.
November to May 2018 Consumer Prices – Gains & Losses in Percent
|Nov 2017||Dec 2017||Jan 2018||Feb 2018||Mar 2018||Apr 2018||May 2018||12 Month|
|Food at home||-0.1||0.2||0.1||-0.2||0.1||0.3||-0.2||0.1|
|Food away from home||0.2||0.2||0.4||0.2||0.1||0.2||0.3||2.7|
|Gasoline (all types)||6.0||-0.8||5.7||-0.9||-4.9||3.0||1.7||21.8|
|Utility (piped) gas service||0.7||1.0||-2.6||4.7||-1.2||-0.4||-0.6||-0.8|
|All items less food, energy||0.1||0.2||0.3||0.2||0.2||0.1||0.2||2.2|
|Commodities less food, energy||-0.1||0.2||0.4||0.1||-0.1||-0.1||-0.1||-0.3|
|Used cars and trucks||0.5||0.7||0.4||-0.3||-0.3||-1.6||-0.9||-1.7|
|Services less energy||0.2||0.3||0.3||0.2||0.3||0.2||0.3||3.0|
The BLS typically releases inflation data around the middle of every month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for May and the latest annual period become public on July 14, 2018.
CPI data is used in calculating inflation rates and in this site’s inflation calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.